It is fairly well understood that medical costs — such as a two-day emergency hospitalization that comes with a bill of more than $100,000 — are a primary cause of bankruptcy in America.
Changes in health insurance plans under the Patient Protection and Affordable Care Act are in the works. But deductibles and copays, costs borne by a patient with health insurance, still exist. Those costs can throw family finances into a tailspin. Many patient advocates are suggesting that the patient become actively involved in the process, and that these exorbitant and financially devastating costs can be managed in the following ways:
- Contact the medical billing office – Your first line of defense is to speak with the medical care provider to explain that you are having a difficult time paying the bill. The provider may make an offer that you can manage.
- Negotiate based on Medicare pricing – On average, Medicare negotiates healthcare services at about one-quarter of what is charged on the open market. That’s about a 75 percent discount. Negotiating for that price is not out of line. Cite Medicare as you do.
- Seek asset protection through legal strategies – You can transfer some assets, including a car, a home and financial instruments (stocks, bonds, etc.) to trusted family members. Then, declare Chapter 7 or Chapter 13 bankruptcy. These legal approaches are not advisable for everyone and have downsides, but for some people, it can make sense.
The third route, declaring bankruptcy, needs to be handled carefully. A qualified New York bankruptcy attorney can guide patients through the process to make sure the objectives of minimizing financial losses because of illness or injury are met.